- Mark Up = Gross Profit / Cost of Goods Sold
- Gross Profit = Sales – Cost of Goods Sold
- It shows the percentage of Gross Profit in relation to the Cost of the Product.
- It shows the operational efficiency of a company as well as its pricing policy.
- The higher the prices it receives, the more sales effect the result, and
- It allows the company to cover its expenses and present a satisfactory gross profit.
